Prepare the journal entries to record the following transactions for Sunland Wholesale Company, which has a calendar year end and uses the straight-line method of depreciation. - Your answer is partially correct. On September 30, 2028, the company sold old equipment for $42,800. The equipment was purchased on January 1, 2026 for $89.400 and was estimated to have a $14,100 salvage value at the end of its 5-year life. Depreciation on the equipment has been recorded through December 31, 2027. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Date September 30, 2028 September 30, 2028 Depreciation Expense Accumulated Depreciation-Equipment (To record depreciation expense for the first 9 months of 2028) Cash Accumulated Depreciation-Equipment Loss on Disposal of Plant Assets Equipment (To record sale of delivery equipment) Debit 64,935 42,800 37,650 8,950 Credit 64,935 89,400

Prepare the journal entries to record the following transactions for Sunland Wholesale Company, which has a calendar year end and uses the straight-line method of depreciation. - Your answer is partially correct. On September 30, 2028, the company sold old equipment for $42,800. The equipment was purchased on January 1, 2026 for $89.400 and was estimated to have a $14,100 salvage value at the end of its 5-year life. Depreciation on the equipment has been recorded through December 31, 2027. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Date September 30, 2028 September 30, 2028 Depreciation Expense Accumulated Depreciation-Equipment (To record depreciation expense for the first 9 months of 2028) Cash Accumulated Depreciation-Equipment Loss on Disposal of Plant Assets Equipment (To record sale of delivery equipment) Debit 64,935 42,800 37,650 8,950 Credit 64,935 89,400

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 9P: During 2019, Ryel Companys controller asked you to prepare correcting journal entries for the...

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Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of 8 years and a residual value of 300. The double-declining-balance method of depreciation is used. Required: 1. Compute the depreciation expense for each year of the assets life and book value at the end of each year. 2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the assets life, compute the depreciation expense for each year of the assets life. 3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the assets life.
During 2019, Ryel Companys controller asked you to prepare correcting journal entries for the following three situations: 1. Machine A was purchased for 50,000 on January 1, 2014. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 25,000. The estimated residual value remains at 5,000, but the service life is now estimated to be 1 year longer than estimated originally. 2. Machine B was purchased for 40,000 on January 1, 2017. It had an estimated residual value of 5,000 and an estimated service life of 10 years. it has been depreciated under the double-declining-balance method for 2 years. Now, at the beginning of the third year, Ryel has decided to change to the straight-line method. 3. Machine C was purchased for 20,000 on January 1, 2018, Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value of the machine is 2,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry necessary for each situation to record depreciation expense for 2019.
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